B-292300: May 29, 2003

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This is our report on a major rule promulgated by the Department of Agriculture. It was published in the Federal Register as an interim rule on May 8. Enclosed is our assessment of the CCC's compliance with the procedural steps required by section 801(a)(1)(B)(i) through (iv) of title 5 with respect to the rule. If you have any questions about this report. The official responsible for GAO evaluation work relating to the subject matter of the rule is Robert Robinson. Total CRP outlays are estimated to increase $1.5 billion. While commodity program outlays are estimated to decline about $1.7 billion during FY 2003 through 2012. The additional 2.8 million-acre enrollment is estimated to decrease combined CRP and commodity program outlays by $208 million annually during the 10-year period.

The Honorable Thad Cochran Chairman The Honorable Tom Harkin Ranking Minority Member Committee on Agriculture, Nutrition, and Forestry United States Senate

The Honorable Bob Goodlatte Chairman The Honorable Charles W. Stenholm Ranking Minority Member Committee on Agriculture House of Representatives

Pursuant to section 801(a)(2)(A) of title 5, United States Code, this is our report on a major rule promulgated by the Department of Agriculture, Commodity Credit Corporation (CCC), entitled "2002 Farm Bill--Conservation Reserve Program--Long-Term Policy" (RIN: 0560-AG74). We received the rule on May 15, 2003. It was published in the Federal Register as an interim rule on May 8, 2003. 68 Fed. Reg. 24830.

The interim rule amends the Conservation Reserve Program (CPR) regulations to set forth the terms and conditions of enrolling acreage in the CPR, update program eligibility requirements, eliminate unnecessary regulations, and improve the remaining regulations. The rule implements changes made to the CPR by the Farm Security and Rural Investment Act of 2002 (2002 Act).

Enclosed is our assessment of the CCC's compliance with the procedural steps required by section 801(a)(1)(B)(i) through (iv) of title 5 with respect to the rule. Our review indicates that the CCC complied with the applicable requirements.

If you have any questions about this report, please contact James W. Vickers, Assistant General Counsel, at (202) 512-8210. The official responsible for GAO evaluation work relating to the subject matter of the rule is Robert Robinson, Managing Director, Natural Resources and Environment. Mr. Robinson can be reached at (202) 512-3841.

The CCC performed a cost-benefit analysis of the interim rule. Total CRP outlays are estimated to increase $1.5 billion, while commodity program outlays are estimated to decline about $1.7 billion during FY 2003 through 2012, primarily due to a $1.5 billion counter-cyclical payment decline. The additional 2.8 million-acre enrollment is estimated to decrease combined CRP and commodity program outlays by $208 million annually during the 10-year period.

Total estimated impacts for the additional CRP enrollment, including $326 million annual economic losses due to higher crop prices and reduced crop supplies (buyers' loss) and estimated average annual economic benefits (increased farm incomes and environmental benefits), results in estimated net economic benefits of $131 million per year.